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Abstract:
Charlie HebdoThat many Muslims oppose free speech—often violently—is again made obvious by this week's terrorist attacks in France. There, two groups of Muslim terrorists slaughtered sixteen people, twelve at or near the offices of Charlie Hebdo, a satirical publication that ran “offensive” images of Muhammad.

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Who would argue that producing and using fossil fuels is not only not shameful, but also positively virtuous? Alex Epstein would. And he has done so eloquently and thoroughly in his book, The Moral Case for Fossil Fuels.

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Free Market Economics: An Introduction for the General Reader, by Steven Kates. Northampton, MA: Edward Elgar Publishing, 2011. 352 pp. $50 (paperback). Not since 1924 has there been a comprehensive yet readable book on economics aimed at the ordinary but intelligent citizen that defends and incorporates the field's foundational principle, Say's Law (named after Jean-Baptiste Say, 1767–1832) and its main corollaries: the primacy of production, the entrepreneur as prime mover, and prices as the commercial language that coordinates economies and their subsectors. Now we have such a book: Free Market Economics: An Introduction for the General Reader by Australian business economist Steven Kates. His prior books examined the prevalence of Say's Law among top economists during the pro-capitalist 19th century and its abandonment by most economists in the anti-capitalist 20th century. The handful of texts on economic principles since the 1920s that recognize the superiority of a free economy have been too technical, narrowly devoted to refuting economic fallacies, or tainted by dubious philosophy. This book avoids such flaws. Kates accomplishes what was last achieved by Oxford professor Henry Clay (1883–1945) in Economics: An Introduction for the General Reader (1924). Better still, Kates's book offers a modern, more sophisticated, more pro-capitalist treatment than did Clay's book, and it provides the ideas people need to grasp and refute the disastrous dogmas and policies of Keynesianism. At the core of this book is Say's Law, the principle that supply constitutes demand, that one cannot demand (or purchase) anything in any market without first producing an economic value for offer (or, in a monetary economy, without first earning spendable income by producing value). This principle recognizes that markets are made by the producers and that the most economically important producer of all is the entrepreneur, who specializes in soliciting and coordinating the other main factors of production: land (including raw materials), labor, capital, and financing. Say's Law condenses the truth that material prosperity is attained not by consuming (using up) wealth, but by saving, investing, and producing wealth. Unlike most textbooks today, Kates's says economics should explain wealth creation, or “net added value,” not how we ration “scarce resources.” Keynesianism, Kates explains, explicitly rejects Say's Law and asserts that a free market is prone to “failures” and crises, to excessive production, deficient consumption, and depressions; it further insists that government deficit spending, money printing, and near-zero interest rates can fix said market failures. Keynesian policies assume, contra Say's Law, that there can be an aggregate, economy-wide excess of abundance, or deficiency of aggregate demand. Say's Law holds that aggregate supply and aggregate demand are the same thing viewed from different perspectives and thus cannot be unequal; recessions entail reduced production and typically (but not always) are caused by government policies that are antithetical to production and profits. In contrast to Keynesianism, Say's Law, properly understood, tells economists (and citizens) to reject the contradictory claim that a contracting economy reflects an overexpanding economy, that somehow poverty is caused by prosperity, and it recommends the rejection or removal of any policies that impede or depress the incentive or capacity of entrepreneurs to create wealth or employ other factors of production. According to Kates, Say's Law “is the essence of market-based economics”; and “without the clarity that [it] brings, economic theory has lost its moorings and the irreplaceable value of leaving things to the market in directing economic activity cannot be understood” (p. 6). Yet, the classical, Say-based theory of the business cycle and public policy “has the ability to penetrate the darkness left by Keynesian theory in understanding the causes of recessions and the steps that are needed to bring recovery about” (p. 7). . . .

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The Conscience of the Constitution: The Declaration of Independence and the Right to Liberty, by Timothy Sandefur. Washington, DC: Cato Institute, 2014. 200 pp. $24.95 (hardcover). While the principles of liberty on which America was founded are under attack from so-called liberals and conservatives alike, and while expanding abuses of government power are too vast and complex for most Americans to fully follow, books by rational, knowledgeable professionals clearly and concisely explaining the problems and offering solutions are of immense value. Timothy Sandefur's The Conscience of the Constitution: The Declaration of Independence and the Right to Liberty fits this bill. Sandefur, a principal attorney at the Pacific Legal Foundation and an adjunct scholar at the Cato Institute, bases his latest work on an underappreciated idea in American legal thinking. It is the idea that the Declaration of Independence—understood as a formal, legal, diplomatic document issued by the representatives of thirteen British colonies to the king of England—is part of the law of the land, just as are the Constitution and the Bill of Rights. In fact, argues Sandefur, the Declaration used to be seen as the “conscience of the Constitution,” and reviving this understanding of its position in the framework of U.S. law will go a long way toward establishing the moral and political context within which lawyers, judges, and Supreme Court justices should argue and interpret constitutional law. Sandefur's thesis is controversial and is not likely to be well received in modern courts and law classrooms. Most law schools teach students to view the Declaration as a mere manifesto or letter of aspiration. But Sandefur wages a compelling intellectual defense of the Declaration-as-law on two fronts: against leftists, who have ridiculously claimed that the document was drafted as a wink-and-nod effort by elite white men to put down minorities and the lower classes; and against conservatives such as Russell Kirk and neoconservatives such as Irving Kristol who, afraid of its “natural rights” language, dismiss the ideas of the Declaration and characterize it as an underhanded “ploy to lure the French” into conflict with the English (p. 14). Sandefur, pointing out the baseless nature of such criticisms, puts forth a strong argument for holding the Declaration as law and highlights the Founding Fathers' own understanding of it as such. . . .

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Was Abraham Lincoln, as most Americans believe, a defender of individual rights, a foe of slavery, and a savior of the American republic—one of history's great heroes of liberty? Or was he a tyrant who turned his back on essential founding principles of America, cynically instigated the bloody Civil War to expand federal power, and paved the way for the modern regulatory-entitlement state? In the face of widespread popular support for Lincoln (note, for example, the success of the 2012 Steven Spielberg film about him) and his perennially high reputation among academics, certain libertarians and conservatives have promoted the view that Lincoln was a totalitarian who paved the way for out-of-control government in the 20th century. Those critics are wrong. Contrary to their volumes of misinformation and smears—criticisms that are historically inaccurate and morally unjust—Lincoln, despite his flaws, was a heroic defender of liberty and of the essential principles of America's founding. Getting Lincoln right matters. It matters that we know what motivated Lincoln—and what motivated his Confederate enemies. It matters that we understand the core principles on which America was founded—and the ways in which Lincoln expanded the application of those principles. It matters that modern advocates of liberty properly understand and articulate Lincoln's legacy—rather than leave his legacy to be distorted by antigovernment libertarians (and their allies among conservatives), leviathan-supporting “progressives,” and racist neo-Confederates. My purpose here is not to present a full biographical sketch of Lincoln, nor to detail all types of criticisms made against him. Rather, my goal is to present sufficient information about Lincoln and his historical context to answer a certain brand of his critics, typified by Ron Paul, formerly a congressman from Texas and a contender for the Republican Party's presidential nomination in 2008 and 2012. Paul and his ilk characterize Lincoln's engagement of the Civil War as a “senseless” and cynical power grab designed to wipe out the “original intent of the republic.” Such claims are untrue and unjust, as we will see by weighing them in relation to historical facts. Toward that end, let us begin with a brief survey of claims by Lincoln's detractors. The revision of Lincoln and his legacy began in earnest soon after the Civil War, but, at the time, it was relegated to the intellectual swamp of Confederate memoirs and polemics. What was once the purview of a defeated and demoralized rump and of early anarchists such as Lysander Spooner has picked up steam within the modern libertarian movement. In the early 20th century, the acerbic newspaperman and social critic H. L. Mencken seriously suggested that the Confederates fought for “self-determination” and “the right of their people to govern themselves.” He claimed that a Confederate victory would have meant refuge from a northern enclave of “Babbitts,” the attainment of a place “to drink the sound red wine . . . and breathe the free air.” Mencken's musings were but a symptom of a broader change in how many Americans came to view the Civil War. The conflict was no longer “the War of the Rebellion,” but “the War between the States.” The Confederate cause was no longer an essentially vile attempt to preserve slavery, but an honorable attempt to preserve autonomous government. Not coincidentally, during this period, Confederate sympathizers built monuments to the Confederacy throughout the South, and D. W. Griffith's openly racist silent film The Birth of a Nation presented revisionist Civil War history and contributed to the rebirth of the Ku Klux Klan. Sometimes Confederate sympathizers claimed that the Civil War was not really about slavery; other times they claimed that slavery was a glorious institution the South sought to preserve. More recently, Murray N. Rothbard—widely regarded as the godfather of the modern libertarian movement (and someone who saw Mencken as an early libertarian)5—characterized the Civil War as the fountainhead of the modern regulatory state: The Civil War, in addition to its unprecedented bloodshed and devastation, was used by the triumphal and virtually one-party Republican regime to drive through its statist, formerly Whig, program: national governmental power, protective tariff, subsidies to big business, inflationary paper money, resumed control of the federal government over banking, large-scale internal improvements, high excise taxes, and, during the war, conscription and an income tax. Furthermore, the states came to lose their previous right of secession and other states' powers as opposed to federal governmental powers. The Democratic party resumed its libertarian ways after the war, but it now had to face a far longer and more difficult road to arrive at liberty than it had before. Thomas DiLorenzo, a colleague of Rothbard's until Rothbard's death in 1995, penned two books responsible for much of today's libertarian and conservative antagonism toward Lincoln: The Real Lincoln: A New Look at Abraham Lincoln, His Agenda, and an Unnecessary War (2002) and Lincoln Unmasked: What You're Not Supposed to Know About Dishonest Abe (2006). (Both DiLorenzo and Ron Paul are senior fellows of the Ludwig von Mises Institute, an organization that, while bearing the name of the great Austrian economist von Mises, is more closely aligned with Rothbard's anarchist views.) Largely through his influence on popular economist Walter E. Williams, who wrote the foreword to DiLorenzo's 2002 book, DiLorenzo has reached a relatively wide audience of libertarians and conservatives. Williams is known to many as a genial guest host for The Rush Limbaugh Show, a fellow of the Hoover Institute, and a distinguished professor of economics at George Mason University. He gave his imprimatur to DiLorenzo's work, thereby elevating what might otherwise have been a peculiar book from the depths of Rothbard's libertarian, paleoconservative, neo-Confederate intellectual backwater to a nationally known and provocative piece of severe Lincoln revisionism. What are the essential criticisms leveled against Lincoln by such writers as Mencken and DiLorenzo? The most important of these criticisms can be grouped into four categories. First, these critics claim, Lincoln eviscerated the right of secession supposedly at the heart of the American Revolution. Second, say the critics, Lincoln did not truly care about slavery; he invoked it only to mask his real reasons for pursuing war—to expand the power of the federal government. Anyway, the critics add, slavery would have ended without a Civil War. Third, argue the critics, Lincoln subverted the free market with his mercantilist policies, thereby laying the groundwork for the big-government Progressives to follow. Fourth, Lincoln supposedly prosecuted the war tyrannically; in DiLorenzo's absurd hyperbole, Lincoln was a “totalitarian” who constructed an “omnipotent” state. Let us look at each of these criticisms in greater detail—and put them to rest—starting with the claim that Lincoln spurned the fundamental principles of the founding by opposing secession.

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Timothy Sandefur is a principal attorney at the Pacific Legal Foundation who focuses on economic liberty. Recently I had the opportunity to interview him about his new book on the Declaration of Independence, his work at the Foundation, and related matters. —Ari Armstrong Ari Armstrong: Thank you for taking the time to share your thoughts with us. Timothy Sandefur: Thanks for having me. AA: Your book, The Conscience of the Constitution: The Declaration of Independence and the Right to Liberty, was published early this year. How would you summarize its central arguments? TS: I argue that individual liberty is the central value, the conscience, of the Constitution. The Constitution says in its very first sentence that liberty is a “blessing.” But it doesn't say the same thing about democracy or about government in general. That is because the authors of the Constitution were building on a foundation of political philosophy, and that philosophy is articulated in the Declaration of Independence—that we are all properly equal before the law and have inalienable rights that no just government may infringe. This principle is the guidepost—the conscience—that helps us to guide our constitutional course. Or it would be the guidepost, if 20th-century thinkers had not abandoned the principles of the Declaration and replaced them with the ideas that government action is presumptively legitimate and that individual rights are just privileges the government gives to us when it chooses to. That shift is how our constitutional understanding has gone awry, and it's a leading reason why so much of the legal profession is unable to understand the document they're interpreting. The result is that our constitutional law has bizarre blind spots and contradictions. The “public use” clause was essentially erased in the infamous Kelo eminent domain case. The privileges or immunities clause was essentially erased in the 1870s in the Slaughterhouse Cases. The due process clause has been radically curtailed. These trends are a consequence of lawyers, judges, and law professors typically prioritizing democracy over liberty as a central constitutional value. So the “conscience” I refer to is a voice in our constitutional order telling us when we do something wrong. That voice is the Declaration of Independence. That's why I defend the idea of “substantive due process” [defined below]—something both conservatives and liberals have rejected nowadays. And it's why I don't buy arguments for “judicial restraint”—which usually seem to mean that when the legislature violates the Constitution, the courts should just look the other way—again, to prioritize democracy over liberty. AA: You argue that early American lawyers and political leaders understood the Declaration of Independence as an important interpretive guide to the Constitution. How was that understanding lost in American law?

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This debate between Craig Biddle and Max Borders was held at the “Liberty, Free Markets, and Moral Character” conference, cosponsored by the Clemson Institute for the Study of Capitalism and the Foundation for Economic Education, at Clemson University on May 25, 2014. Download the pdf for free. Moderator C. Bradley Thompson: The gladiators are now in the cage. Let the friendly fight begin. [Laughter from the audience.] Photo: FEE Photo: FEE In many ways, the debate that's going to take place, I think, is representative of what both the Clemson Institute for the Study of Capitalism and the Foundation for Economic Education stand for. We're trying to expose you to ideas, and the big ideas are not simply those of capitalism versus socialism, right versus left. Within the broader liberty movement, there is a diversity of views on a whole range of issues. Just within the libertarian movement, there are all kinds of public debates. Within the Objectivist movement, there are all kinds of debates. And between libertarians and Objectivists, there are some very important, fundamental differences. What we'd like to do today is flesh out one of the big differences between libertarians and Objectivists. I don't think I need to introduce our two combatants today: Max Borders, from FEE, and editor of The Freeman; and Craig Biddle, editor of The Objective Standard. So we have the editors of two major liberty-oriented publications. I know Max and Craig have a lot that they agree on, and we're going to find out what they disagree about. And we're going to conduct this, of course, not as a cage fight, but as a civil discourse among friends. Here's the format: Craig and Max will each be given fifteen minutes for opening remarks, then they will each get five minutes to either respond or make follow-up comments, and then they'll get another five minutes each to respond or make further comments. After that, we're going to open up the floor to you for questions. So we're going to have at least forty minutes for Q from the floor.

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Argues, via a mountain of evidence, that the ultimate purpose of central banking is not to "correct market failures" or "prevent financial crises" or the like, but to finance fiscally profligate governments and welfare states.

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Surveys various problems inherent in focusing on the non-essential characteristic of government\'s size rather than on the truly essential characteristic of whether and to what extent government protects or violates individual rights.

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If you want to learn the theories and history of economists who champion government controls of the economy-and of economists who criticize such intervention-Randy T. Simmons's Beyond Politics: The Roots of Government Failure is a fantastic resource.